Crisis? What Crisis?

Amid the global financial doom, an awful lot of people are doing rather nicely, thank you very much, writes Marc Moncrief.

CRISIS, it is said, ties the tightest bonds. The financial crisis has given Jennifer Heald and Alex D'Castro a bond they did not expect. What's even better, they have not even had to suffer for it.

Heald, 24, and D'Castro, 27, have bought a home - a first home.

To some it is the freedom to hang pictures. To others, a place to call your own. Some are pure investors out to make a buck. Some will value the satisfaction of providing shelter for their children.

All of these reasons, whether pragmatic or emotional, tend to be tied up in a declaration of one's own value as a person: driving a stake into the ground to grab hold of the Great Australian Dream.

For Heald and D'Castro, the two-bedroom house being built for them in Altona Meadows is the next step in their two-year relationship. And yet, were it not for the world economy falling to pieces, they would be years away from it.

"Six months ago this was right out of reach," Heald says. "We had to look at each other and think, do we want to commit to each other - in a financial sense? Well, we're in a commitment now ... We will need equity to buy the ring."

"It was a little dramatic at first to make such a huge financial commitment to somebody," D'Castro agrees, in a separate interview. "We're not married yet but, if anything, it has kind of strengthened our relationship."

Thanks very much, global financial crisis.

Sharemarkets are plummeting. Whole industries are being gutted by job cuts. Corporate bail-outs rule the headlines.

The world - as everyone surely knows by now - has spent more than a year teetering on the brink of financial collapse and economic ruin.

And as a result, Heald and D'Castro and a whole lot of other people are going very well, thank you.

With all the bad news it can be easy to forget that every heft and plonk in every economic cycle has its winners.

Almost two years since the US subprime market began causing havoc around the world, many who missed out on the pre-subprime era of economic boom are experiencing a brief, beautiful window of opportunity. Call the story "How I Learned to Stop Worrying and Love the GFC".

Over last week and next, the Federal Government is distributing its economic stimulus package, handing out billions to pensioners, families and health-card holders.

The total package comes to $10.4 billion, but according to CommSec, about 70per cent of that is expected to be saved.

That means the immediate stimulus to the economy from the package is likely to be something closer to $4.2 billion.

Add to that yesterday's announcement of $4.7 billion in new money to spend on transport and education over the next three years - money the Federal Government expects to create 32,000 jobs.

And yet, the jolt from both of these packages is eclipsed by the effect of an unprecedented drop in interest rates and the plummeting petrol price.

CommSec economist Craig James estimates that the Reserve Bank's recent rate cuts - from 7.25 per cent in September to 4.25per cent now - are injecting $2.1billion into the Australian economy every three months. That figure will only get bigger, with more interest rate cuts on the way. Investors expect rates to be cut another full percentage point by February.

Cheaper petrol has provided another $2.2 billion as the bowser price has dropped from a high of $1.63 to about $1.

"If there is one price that consumers can monitor, it is petrol, and the substantial falls in pump prices have given consumers a rosier outlook," CommSec economist Savanth Sebastian wrote in a note to clients this week.

By the end of the year, the stimulus from lower interest rates and petrol prices is set to dwarf the Government's injection, and while people are likely to pocket their Government windfall, money from the monthly budget that is not spent on debt or driving is more likely to be spent somewhere else.

This week, new figures showed consumer sentiment - the degree of positivity among the buying public - ticking upward for the second month in a row.

"We've seen some good indicators recently: Victoria has the highest level of building approvals in the country, retail trade continues to grow and consumer confidence has improved in each of the last two months," state Treasurer John Lenders says.

"If we can build confidence further, we will see more money in the hands of our retailers and manufacturers, and ensure that jobs will continue to be created."

The state Treasury calculates that the average Victorian household is $633 a month better off compared with July, thanks to lower interest rates, lower petrol prices and tax cuts handed down in the last federal budget.

Some of that money is going to Tim Holdsworth, a 30-year-old jeweller with a shop in Camberwell.

"The majority of our customers are workers," Holdsworth says. "As interest rates have dropped away and fuel prices have dropped away, our customers have a lot more money."

Holdsworth doesn't sell the flash, showpiece items as often as he may have done in years past, but more customers buying less expensive items means good turnover and a steady stream of sales.

Holdsworth and his 27-year-old de facto partner Carmen Moore are seeing a boon on both sides. They took their money out of the share market pre-bust to buy a house in Northcote on a variable-rate loan that has become cheaper and cheaper over the past few months.

Sure, their superannuation accounts are probably hurting, but they hardly notice. They are young. Whatever lumps their retirement savings may have taken

are of negligible relevance to their daily lives.

"I have always been of the opinion that the crisis has only affected people who have lots of money invested, basically, in shares," Holdsworth says. "For the rest of us - especially if we have a lot of debt - it has only been a benefit."

Count Heald and D'Castro among those benefiting.

"We would not have been able to do it if we hadn't got that $26,000," Heald says, giddy with home-owner glee.

That $26,000? It is the sum total of first-home buyers' grants they were able to claim on their house.

As part of his "economic security strategy", Prime Minister Kevin Rudd added $7000 to the grant for existing properties and $14,000 for new homes.

Heald and D'Castro were among those the boost put over the line.

"It was more or less a deal maker," D'Castro says. "Get the full $26,000, and that gets you your 10 per cent deposit on a $250,000 home. If you kick in a little bit of money on your own, that gets you enough money to get - not a huge house - but at least into the market."

The couple had visited the bank just a few months ago and been told that, despite good jobs and a bit of savings, they could not get the loan they wanted.

But a few months can be a long time when the world is falling to pieces around you.

"We paid our taxes. It was about time we got something back," Heald says.

These days, a steady salary, good credit and a bit of money in the bank mean more to lenders than they once did. It may be harder to find lenders willing to take big risks, but for people with steady budgets, money comes cheaper.

Over October, the first signs of improvement began creeping into the housing market, with new figures showing home lending increased for the first time since January.

Money lent to people who live in the house they were borrowing against increased in October after falling 27 per cent over the previous eight months.

Most of the home loans went to people refinancing their homes, but some would be headed to buyers, such as 27-year-old Mark Grech, who are being lured to the market by better rates.

Grech left his teaching job three years ago to take on a carpentry apprenticeship. The move gave him a chance to explore a different career route, but cut $20,000 from his annual pay.

Now he is returning to teaching but, financially, he is behind where he might have been. Buying a house was out of the question during his apprenticeship and he has been living with his family.

However, Grech is also taking advantage of the first-home buyer grant, and cheaper money from the banks. All of a sudden a home is within his grasp.

"Banks who probably would not have even looked at me before are willing to take my business," he says. "It's unreal. In my head I always thought that I would not be able to buy a house for another two years or so."

Houses made unaffordable by cashed-up investors and families with great expectations of home values climbing are coming back into reach for people priced out in the boom.

In the three months to September's end, house prices in Melbourne dropped 3.3 per cent while wages continued to rise.

And while jobs are being shed, unemployment is still low at 4.3 per cent. Everyone expects it to rise, but opinions vary about how big the rise will be. Bank economists expect a 6.4 per cent unemployment rate by 2010. Investment bank JP Morgan is the big tipper, with a forecast for 9 per cent.

The Victorian Government, meanwhile forecasts a moderate rise to 6 per cent by 2012.

These forecasts are higher than today's rate, and there is no doubt every lost job hurts, but put it in context: in the last slowdown, in 2001, unemployment nationwide reached 7.1 per cent. In the last recession, in 1992, it reached 10.9 per cent, according to the Reserve Bank.

This week, a survey by credit watchers Veda Advantage put some numbers to the pleasure and to the pain.

The survey found 40 per cent of Australians hurting under tougher economic conditions planned to spend up to $1000 less on Christmas presents this year.

Another 32 per cent said they would spend about the same amount.

That left 26 per cent planning to spend more - up to $1000 more - on presents.

So, for now, there are a fair number of people who are strolling safe amid the rubble.

The only question is whether the good times for the few enjoying them can last. All the signposts point to next year as the turning point.

Many in the housing industry now expect the median home price could fall by up to 10 per cent next year, with only those forced to sell bringing their homes to market. So much for the "affordability crisis".

Retailers, particularly those that sell imported goods such as plasma-screen televisions and other high-tech toys, will raise prices - probably by between 10 and 15per cent - because the Australian dollar just doesn't buy as much in foreign countries as it did a few months ago.

More companies will be pushed to the wall, and more jobs are certain to be lost. The insolvency practice at law firm Cornwall Stoddart has just hired three new lawyers and expects to bring on more to deal with all the work they will have picking through the pieces of broken companies.

"I'm flat out like a lizard drinking," says insolvency partner Wayne Kelsey. "But next year is going to be crazy."

And spare a thought for all those boomers on the brink of retirement who put their nest egg into a share-heavy super account to take advantage of the Federal Government's $1 million tax-effective window in June last year.

Since then the S